Capitaland commercial trust confirms sale of office tower for $516M

CapitaLand Commercial Trust Confirms Sale Of Office Tower For $516 Million

SINGAPORE – CapitaLand is a name well known in the commercial real estate domain. Recent reports reveal that CapitaLand Commercial Trust (CCT) has sold its Singapore office tower for a whopping S$516 million. As a part of this transaction, the company would sell the Twenty Anson building, a 20-storey office building in Tanjong Pagar region. The deal is huge and it could benefit the company in many ways.

CapitaLand Commercial Trust is a Singaporean listed REIT and it is also the largest commercial REIT of Singapore. It announced that its trustee had a deal to sell the building to a third party that is not related to them by any chance. However, rumor has it that the buyer of the grade A office building is a foreign private equity fund.

CapitaLand is the biggest developer in Singapore and CCT is its office focused REIT affiliates. The new transaction, which would close by the 3rd quarter, will simmer down the Singapore centric portfolio of CCT to now 10 properties with a net lettable area of 4.7 million square feet after the sale.

The price that has been agreed on to sell the building would mean that the agreed selling price is about S $2,503 per square foot of a total net lettable area of 206,000 square feet property. It is also 19.2% higher than the asset valuation of about S $433 million by the end of 2017. It is also 20% higher than the whopping amount of S $430 million that it’s CCT division paid for the building back in 2012.

The tower that the company is selling was completed in 2009 so it is still relatively new. It is located on 20 Anson Road and had a net property income of about S$13.8 million for the starting 12 months till March 31. At that time, the asset had just 3% of the total net property income of CCT.

According to Shaun Poh of Cushman & Wakefield, the company that brokered the sale, the sale of the office building is the largest office transaction this year. It has taken place at a time when the office investment market has somewhat gotten back on its rental recovery phase in the key office market.

Adding further, he said that the deal is going to bring an enhancement in the investor confidence in a market that is already rebounding.

CCT has investment properties of about S$10.9 million at the year-end till 2017 and it continues to improve its portfolio with diversified investments. CCT has many buildings under its portfolio but it emerges that the company has decided to sell one of its crucial properties.

This new sale could mean a lot of things for CCT that could benefit from the sale of the office tower directly in terms of high capital that could be invested elsewhere. CCT might also get more profitable ventures from its sale. CCT is a renowned name in Singapore and has been in the news time and again for its various acquisitions and sales.

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